Some Smartphone Snippets: Nokia Q4, HP is Back, Tizen Delayed Again (Updates with Nokia Lumia ASP etc)

Lets do some smartphone items. We're in the Q4 results season and we have Nokia's numbers but Nokia is being naughty, decided not to give us the detail they have always given in the past... Also we have some good news from HP and some bad news from Tizen. Lots of bad news from Tizen. But lets take the Nokia numbers first.

NOKIA SMARTPHONE SALES DOWN AGAIN

So we did not get the actual numbers anymore. I predicted that Microsoft would be doing this when it takes over the Nokia handset business. I'm disappointed Nokia already now is resorting to this move. Why is Nokia not reporting the detail of its handset sales? Because they are down in what is usually Nokia's best quarter, the Christmas Q4 quarter. Nokia did not give us the details but in its Quarterly results it did tell us sequential sales revenues were down 5% for the total sold unit which includes the dumbphones and the smartphones. So in very rough terms smartphone sales should be down something like 5% sequentally from Q3 the last quarter we had the precise number at 8.8 million. Then we also learned that the average selling price is down for both dumbphones and smartphones (that drives down the sales revenue figure) but we learned that unit sales were flat sequentially for featurephones but down for smartphones. This leads me to believe that smartphone unit sales were down somewhat more than 5% sequentially from Q3, so I put it at 7% decline ie 8.2 million units.

Until we get a more official number from Nokia, that is my best guess of Nokia Q4 sales at 8.2 million units in its smartphone unit. That gives Nokia a preliminary market share of 2.5% for Q4, down from 3.5% in Q3 (as I predicted it would happen after Microsoft took over the failing Lumia smartphone business from Nokia). Oh, and the overall handset sales are unprofitable again..


UPDATE - note only moments after I posted this, apparently Nokia already confirmed the smartphone number as 8.2 million haha... not bad guesswork eh? I haen't seen the number yet, that was based on a tweet. I'll go dig for it but we can safely assume 8.2 is the right number and if it is not., I will update this blog again.



UPDATE - as we didn't get the usual info from Nokia smartphones like regional splits, average sales prices etc, its nice that some of the detail is emerging. Mobiili.fi the Finnish mobile industry magazine reported that they counted the revenues based on the info that was out, at 1.1 Billion Euros for the smartphone unit in Q4 (this is down 12% from Q3 when usually Nokia reports 25% jump in smartphone revenues in the Christmas quarter). They also kindly calculated the Average Sales Price ASP for the Lumia lne which was 134 Euros in Q4, down from 143 Euros in Q3. So not only are the customers abandoning Nokia massively when the industry has its best growth quarter, they are not willing to pay as much for the Lumia handsets even with the big phablets and other new devices like Lumia 1020 etc - the Microsoft purchase has damaged the already struggling Nokia Lumia line even more if that is possible Thank you Mobiili.fi for the calculations and I know many of our readers on this blog will appreicate at least those details of total smartphone unit revenues and the ASP for Q4.

Let me mention also one truly brilliant piece of writing by Tero Kuittinen at Forbes - not only reporting on the Nokia Q4 results but also about how and why the US analysts tend to misanalyze Nokia so badly, and why this bodes badly for Microsoft's purchase of the Nokia handset unit. Definitely a must-read article!


For the full year Nokia sold thus about 30.5 million smartphones and had 3% market share, down from 35.0 million in 2012 and 5%, and down from 103.6 million in 2010 the last year before Elop's doomed Microsoft strategy when Nokia's market share was 34.8% and the handset unit grew 52% unit sales and generated Nokia record profits... That is the end of the Nokia tale in smartphones. Sad end but yeah, we saw it coming didn't we on this blog. Lets move to the other news.

HP IS BACK

Hewlett Packard is back again into smartphones, promising us two phablets which will run Android. Lets see them soon! Welcome back HP! For those who still remember, HP bought struggling Palm and planned new smartphones using WebOS but then after a new CEO joined the company, HP suddenly announced the end of its smartphones business in 2011. It then sold the WebOS system to LG. But now they've seen the light again - as PC sales globally fell last year but smartphone sales grew by nearly half. 2013 saw roughly 3 times the sales of smartphones than traditional personal computers in volume and most major PC makers are also smartphone makers led by Lenovo. Now HP has seen it has to be in this game and is back. Very good news and hopefully we'll see some good innovation from HP and not only some 'me too' devices.

TIZEN IS DELAYED (is this the end?)

So this was supposed to be the period of great news for Tizen. We heard suddenly from Japan that NTT DoCoMo will not release the first Tizen smartphones in Q1 now after all. Then shortly after that we heard that Samsung won't release a Tizen smartphone in the first quarter either. What was expected to be big news at the Mobile World Congress in Barcelona with many Tizen anouncements and demos is now apparenty winding down. Some rumors suggest one Tizen phone may be out by ZTE but overall, what was seen as the strongest play of the new platforms is seriously damaged by these news.

I take the NTT DoCoMo news as the most significant. That was my reasoning why Tizen had such a strong insider advantage in the race for the new platforms (Sailfish, Ubuntu, Firefox etc) because NTT DoCoMo controlling about half of the Japanese market had a large enough smartphone customer base to alone sustain an ecosystem. If NTT DoCoMo is out of Tizen, the prospects are really bad. And NTT DoCoMo's strong past support has now turned sour. Then the other obvious big player is Samsung. Now that Sammy also is delaying its first Tizen device that is bad news. We also hear separately that Intel is moving away from its smartphone ambitions (why?) so the whole Tizen world is coming apart. We heard earlier that one of the big brands in the partnership, Panasonic was pulling out of all smartphone business (this was befoe these items of Tizen news, middle of last year) but that was one potentially big hardware brand for this alliance.

So my enthusiasm for Tizen is obviously severely dented. It might still work out, but there is no opportunity if there is no handset. And those handsets will do nothing if there is no carrier support. Before we can believe in Tizen, we need both. At the moment both are severely delayed..... We'll keep monitoring this space. More news expected soon in the smartphones end-of-year results. 

Comments

[RottenApple]

@KPOM:

"As for the US market, we've got a lot more competition than you think. T-Mobile and Sprint have gotten very aggressive lately. "

The operative term being 'lately'! Let's wait a bit to see if they can bring some true competition to the market. That'll only happen if AT&T and Verizon have to react.

@Baron:

"I'll guarantee you that Apple share will grow in Germany as soon as the large screen devices arrive. "

That's assuming that there's many users which chose Android over Apple just for screen size and switch back immediately. Just to inform you, I don't know many of these. The Android users I know are quite happy with what they got. I rather think that with growing performance in mid range devices that's where many users will go to. People are slowly realizing that today's phones are fast enough unless you are a gamer so why pay double premium to get something even faster?

[Baron--9-5]

Sorry - Forgot to mention that Apple's gross margins are back up to 37.9% and that Apple got another cave - second largest Operator in Russia is now - distributing and subsidizing the iPhone.

DoCoMo, China Mobile, Reliance, Megafon

See the trend?

Operators boycott Windows Phone, but it is the solid #3 and gaining share.

Operators hate to subsidize iPhone, but keep on signing up.

[Baron--9-5]

Oh, and what strategy did Apple use in Russia. Something totally new.

It signed up a smaller operator Vimpelcom in October, there fore putting pressure on the big guys. Now Megafon is on board (starting soon), and it will put pressure on #1.

How did Apple come up with this ingenious approach?

Oh wait. Never mind. The've done the same thing in the US, Japan, China, etc. Silly me. I was thinking about Microsoft's strategy to avoid the boycott.

[Baron--9-5]

Oppenheimer says that Apple's $57.6 billion in sales is a global record for any technology company.

So much for peak Apple.

[Baron--9-5]

Amazing. iPhone ASP rose from $477 in calendar Q4 2013 to $636. That is massive and indicates that the iPhone 5S is the volume play as opposed to 4, 4S and 5C which are still on sale.

$159 ASP increase is larger than Nokia's ASP - LOL

So that is the trick - record volumes of iPhones (first time more than 50M sold in a quarter) while simultaneously increase ASP.

If only Apple had follow the advice of people here to focus on low cost devices.... LOL - Chuckles.

Now on to distribution expansion and larger screens. The 2014 Apple 1-2 punch.

[Earendil Star]

Fantastic Apple results in Q1!

That's why shares... tumbled 7% after hours?

Ooops, I forgot. The reality distortion field is going on. Especially pro WP. Against Android. Again. Business as usual by the astros on Tomi's blog.

For the others, let's wait for Tomi's take on things when all data are out.

[Baron--9-5]

Guess what was Apple's fastest growing region up 29% you? China. And that is before the China Mobile deal!!

P.S. I think I may have written down the wrong figure for previous quarter ASP - it may be $577, not $477. I'll double check later. Still a huge rise in ASP.

Now for those claiming Apple does well only in the US, or US and Japan, here are the numbers.

Americas (all of the Americas, US, Canada, Mexico, Brazil, etc) was 35% of revenues. Japan was 8%. China was 15%, Europe was 23%.

So US is less than 1/3 of Apple's revenue and going down all the time.

So read again more than 2/3 of Apple's revenue is from outside the US. So adjust your talking points Tomi disciples.

[Baron--9-5]

Oh and iTunes/iCloud/App revenues are now almost FIVE TIMES larger than iPod revenues.

$5B/quarter in NET iTunes revenue (i.e. counting just the 30% that Apple keeps, not the full amount billed). The actually amount billed is approaching $20B/quarter.

THAT is the value of catering to affluent connected customers. $20B/quarter in iTunes spend!!!!!!!

That is bigger than the revenues for the entire movie and music business in the US combined.

Get it?

Start with iPod HW, switch to iTunes content to the point that content is now 5 times larger than the HW that started it.

Show me how Samsung can do the same? They can't.

[Baron--9-5]

More nuggets from the call....China Mobile projecting to expand from 16 cities (where iPhone is available now) to 300 cities by year end.

iPhone sales grew 76% in Latin America and 115% in Central and Eastern Europe - What did I say? Apple is methodical. Now that they have DoCoMo, CM, reliance, etc, they are going into a mop up operation.

That mop up is to make sure that no high income digitally connected person escapes :)

[Baron--9-5]

I still can't believe the Mac. 19% YoY unit volume growth, when the PC market is in decline!!! And that was with less than 1 month of sales of the new models.

That is simply amazing. They must have grown market share by 25% or so. In one year!!! In a mature market! In a market where they are twice more expensive than the competition!!!!

It is amazing.

Ooooops. Never mind. Tomi claims that Apple lost the PC wars. LOL

[Baron--9-5]

This just in:

Windows Phone is the #2 OS/Ecosystem in Latin America (in addition to Italy), ahead of iOS!!!

4.9% for Windows vs 4.3% for iOS in Latin AMerica. 17.1% for Windows, 12.8% for iOS in Italy.

That boycott must be running into high gear now, he?

There you go folks. Window Phone. Solid #3 overall but already #2 in a few important markets!!!

Meanwhile, the market share for Tizen, Linux, Meego, whatever is....well, there is nothing there. :)

Note how Tomi never mentions Kantar survey again? You know, the one that he thought was the best?

[vasra]

@vladkr & @John Fo right - spot on. History gives perspective.

@Baron-9-5 Agree mostly, but your "Silicon Valley superiority" doesn't explain Samsung's position. Besides, China & India are still up for grabs. In 5 years it could all be totally different again.

@LeeBase Now that Apple numbers are out, why don't you crawl back to your fanboy forum, you are out of your league

@nobody in general

I think it is obvious that Jolla delivered a buggy, unfinished and limited-quantity & availability & visibility product into the market with rudimentary support/dev interface. They are unlikely to survive for long.

Tizen's future, imho, will be decided by the Asian (Chinese) markets. It's highly political. See how the operators act. They don't want to become cash cows to Apple. They know the game by now (they've had years to watch the game being played in the OECD).

Europe and North America are already stalling in ASP, volumes and leaders. It's down to ME, Latinas and esp. Asia to show the way next.

The trouble is, we might get a nice big global dip in the interim, which may shake out a few players.

[winter]

@LeeBase
"Most iPhones sold ever."

Also, most WP phones sold ever. But it is Android that determines where the industry will go.

@LeeBase
"The marquee prediction that WP will have more share than the combined alternatives (Tizen, Sailfish, Firefox OS, Ubuntu) is money in the bank"

If everyone else is dead, the one lying in coma wins.

[PlatformWarrior]

I think Mac +19% is largely caused by Windows 8 failure. At least in my case although I have always used Windows (since Windows 3.0), Windows 8 was so bad that I am planning to change my old PC to Mac. I want to buy a PC to get a desktop UI with proper window system, not to use tablet -like UI on a desktop machine or some strange hybrid mixing desktop and tablet UI (a piece of advice to MS UI designers). In addition Mac doesn't feel so strange for consumers (like me) who have been using iOS on a tablet or smart phone. So the success in tablets and smart phones definitely helps Apple to grow PC business as well.

[R]

@PlatformWarrior You are a strange person.

I can only speak for my own peculiar behavior. I just bought a new Mac, while my last PC purchase was 3 years ago, a computer with Windows 7. My decision to buy a Mac was totally influenced by that Windows 7 PC, not by Windows 8.

Actually, I don't mind Windows 8. I've kept my mind supple to adapt to alternate user interfaces. It's the PC that I can't stand anymore.

I wanted to get a laptop with a beautiful user experience. My previous laptop is loud, bendy, slow, with poor screen, and integrates poorly with development tools. It has a discrete GPU, but even that has very poor performance. From what I could tell, the PC market is still saturated with this sort of cost optimization. Like the latest ThinkPad X1 Carbon, which can have a WQHD screen and an enhanced price tag to match, but it has the lowest performance graphics available for each CPU core. In contrast, the Retina MacBook Pros have the fastest GPUs that Intel produces.

But I think familiarity with iOS is a horrible reason to go for MacOS. It's a desktop operating system, not a tablet system, and the user experience is almost completely unlike the iPhone. It's also quite unlike Windows. You'll have to do a lot of adaptation to work with Mac.

I keep my mind supple, also using several distributions and desktops of Linux regularly. A lot of people would rather get Stardock Start8, and configure Windows 8.1 to boot straight to desktop. Ta-da! Something that looks almost exactly like Windows 7, but with better performance.

[newbie]

According to TrendForce, Nokia is out of top 10 for 2013q4, falling to Xiaomi and... guess who? Gionee

[Tomi T Ahonen]

To everyone in this thread

Thanks for the great comments. I was off on winter break and came back yesterday and started to read the comment threads with some replies. As this is already an older thread probably most of you are beyond caring but let me comment on one item that sparked lots of discussion.

The Samsung decline as reported was total handsets not smartphones. Samsung then added I think it was in the conference call a clarifying note that the smartphone sales were up sequentially from Q3. So those all discussing the already-happening Samsung collapse or peak Samsung or Apple's iPhone revenge etc are based on a misunderstanding. Samsung's total handset unit sales are down - including smart and dumbphones. Samsung's smartphone sales were up however.

Please also note separately that the sudden unexpected profit drop was a self-induced deliberate cost taken by the CEO to celebrate Samsung's awesome achievement by passing unscheduled bonuses to staff. That is a one-off cost that caused the profit decline. I fully expect Sammy to return to roughly 'normal' levels of profits in its handset unit in this current Q1 of 2014.

Tomi Ahonen :-)